One of the original intents for No Visitors Allowed was to prevent inactive (not being player controlled) sims from hanging out on rabbithole lots after they were finished working/going to school or whatever their official business on the lot was. With Visitors Allowed, you might get inactives showing up on a school lot to use the playground off to the side, for example, or the snack vendor or bar placed just outside of an entrance to the business building in the courtyard even if they have no other reason for being there. Or they might want to hang out on a subway lot for no particular reason.
But it has other uses as in the LL examples. Although the game won't push sims there, it was never meant to block sims from showing up entirely.